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- [00:00]
A
There's never been a better time to get outside and experience the benefits of nature, discover nearby trails and explore the outdoors with alltrails. Download the free app today and find your outside.
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B
You know that thing where you get an amazing pair of shoes at a really great price and want to tell everyone about it?
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C
Yeah.
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B
So do we here at Designer Shoe Warehouse. We'll give you something to brag about, like the latest styles from brands you love or the trends everyone's obsessing over or shoes that make you feel like, well, you. So go ahead, show off a little. Buying shoes that get you at prices that get your budget. Head to your DSW store or dsw.com today. DSW. Let us surprise you.
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C
Welcome to the Jill on Money show. It's Friday, June 5th, and today we've got a great interview. I really love having friends of mine who write books on the air because I can share their wisdom with you. And you know, it's nice to have another voice that tells you some of the things that we tell you here. And also they have a different lens through which they see the financial industry. So today's guest is Ben Carlson. He has just written a new book. It's called Risk and How to Handle Market Volatility and Build Long Term Wealth. I met Ben through his affiliation at Ritholtz Wealth Management. He is the director of Institutional Asset Management. But importantly, he's kind of a guy who came to this conclusion, conclusion that I came to, which is with all the training in the world, sometimes keeping it simple is really the best way to approach your investing life. So here is our interview with the wonderful Ben Carlson. I hope you enjoy it. So you are a higher up at Ritholtz Wealth Management.
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A
Your official title is Director of Institutional Asset Management.
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B
Okay.
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C
What does that mean to normies at listening to this?
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A
So I started working, I started my life in the working world with nonprofits, endowment funds, foundations, pension plans and came to Ritholtz to do that. And I also work with like family office clients. You know, most of my time is spent doing con content now, but I also do a lot of, you know, time communicating with clients in those, in those areas.
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C
And you also, you sit on the investment committee, right, at Ritholts. So you have like also a very fancy designation, not a lowly one. Like I have just the, the plain old certified financial planner. And I remember that I was thinking should I do the CFP or the cfa, which is your designation? And I was quickly schooled in the idea that the CFA is So much harder. So I chose the cfp. So what does the CFA designation tell the world?
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A
See, I was told the CFP is for extroverts and the CFA is for introverts. Does that work?
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C
That's good. That is good. I think I qualify. That's good. But the CFA is a real technical expertise.
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A
Yeah, more like portfolio management. And it's, it's, you know, they say it's like a mile wide and an inch deep. There's just a ton of data. And I realized when I first got out of school that I had a steep learning curve and there was just a lot that I didn't know. So I was trying to do as much as I could to get better as an investor and become more informed because I was not very employable. I didn't know enough. And so the CFA was a way for me to show employers that I actually cared about this stuff. And I put three years of my life into studying for this test.
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C
You know, once you pass it, then you say to everybody, it's very important. But before you have it, you're like, no, no, no. You can know this, but I think you're right. I think it's a great way. It's like a signifier in many ways. And it's like a way if you were go, okay, let me ask you this. If you met somebody who listened to your shows and loves everything about you and, and everybody at the compound, all that, and they said, I really want to do this, should I get. Should I go get an MBA or a cfa? What would your answer be?
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A
The funny thing is, when I get that question now, I tell people to get your cfp.
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C
Oh, interesting.
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A
Because here's, here's the reason why I think the need for financial advice is going to just grow in the years ahead. And the CFA is more kind of technical. Guess what's really good at doing technical stuff? AI.
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C
Yeah.
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A
CFP is more of the people skills, the soft skills. And that's the stuff that I did not have when I, you know, I, I always say that. Like Josh Brown and Barry Ritholtz, who I work with, they were born salesmen. Like they could see sell a woman in white gloves a ketchup popsicle in 90 degree weather. I don't, I don't have that ability. I had to develop those communication skills. So I think the cfp, it's more of a wider. You know, you're talking not just investments, but you're talking financial planning and insurance and taxes and estate planning and all these different Things, I mean, there's 70 million baby boomers, 13,000 baby boomers retiring every single day between now and the end of this decade. They are going to. There is going to be such a high need for financial advice in the years ahead. I think it's going to be overwhelming.
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C
And I think that as much as everybody likes to gnash their teeth about AI as I just, I just fielded a question from a 50 year old woman who said I could have asked Claude this question, but I'm asking Jill and, and there is something about talking to a human being about what is going on in your life and how you can basically take your hopes and your dreams and your resources and have somebody help you marry those. That to me is a skill set and a need that so many people have. I would say the big complaint that I hear about is, you know, as someone who used to be, you know, in the business is that people still feel like this is a, this is a relationship for rich people only and that the robo advisors weren't able to actually crack it yet because people do want a human being. So where do you see the business going for people who say, have less than a million dollars, who want financial advice? What are their alternatives?
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A
I actually do think that AI is going to be really good for people who would have never gone to see a financial advisor before in terms of answering questions and just getting them on the right path and maybe helping them realize when they get to the point where their life is too complicated now, you really do need to talk to someone. So I think it's going to be good for advisors because it's going to make them more efficient and give them more tools. But it's also going to be good for the DIY people who just have questions and they sometimes in finance, people don't want to sound dumb when they ask. They don't want to ask a question to someone that they think like, oh, this person is an idiot. But now they can ask AI. And AI is not going to call you an idiot. It's going to tell you whatever you want to hear, probably. So I think it's going to be good for both parties, actually.
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C
So you got this new book and you basically have the breaking news on page one, which is there's no secret formula to being an investor. So why write this book? I mean, I know you've written many books, you are some, like you said, you're an introvert and you like to write. But why is this book necessary?
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A
I have been espousing long term Investing principles Since I think I started my blog in 2013, it was pretty good timing because that was right when the market hit new all time highs again. And I said, hey, invest for the long term. And boy, we've been in a bull market ever since then, right? A few setbacks along the way. And in that entire time I've had people who are skeptical and who say, no, there's no way that investing for the long term can work. What about this bad thing that happened in the past? What about that bad thing that happened? What if this thing happens again and they're always, people are always kind of look for an out, like what? You know, there's, it can't just be as easy and simple as, as investing for the long term. And so I said, fine, let's actually just open the kimono and talk about all the bad stuff that's happened over the past 100 years and then put some context around it and then talk about how you manage these risks. Because I think there are some people who just hope that this hope bad stuff just never happens again. Hey, we'll be in a bull market forever. And I wanted to remind people that that's not true either. There are going to be setbacks along the way. The only reason that the stock market is up over the long term is because it can be down over the short term. So I wanted to remind people that, yeah, this is a glorious bull market, but is going to end at some point. Trees don't grow to the sky. There's going to be a financial crisis in the future. There's going to be a crash, there's going to be a recession. All these bad things can and will happen. What do you do about it?
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C
You know, I have been very honored to recently I interviewed David Booth from Dimensional and I know you're familiar with the dimensional fund world there. He said something that was, I thought, like could have been a quote in your book because in talking about bull markets and bear markets and, you know, volatility, his quote was fascinating. He says, accepting uncertainty doesn't mean giving up. It means preparing for multiple outcomes. And I think that that's something that investors don't really wrap their minds around when things are going well. But what happens and how do you prepare if you have the unlucky occurrence of retiring and then a huge recession hits, how are you planning to make sure that you can pull money out of an account at a rate that won't kill you and SAP all of your funds if the market turns against you? So how Important is this concept of uncertainty and volatility. How important is that when you guys do the planning work that you do at Ritholtz?
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A
Yeah. I think the two biggest words there are flexibility and durability. I think those are the most important things because I like to say that a financial plan is not an event, it's a process. And I think some people are too rigid in their definitions of these things. I don't know if anyone actually ever has done the 4% rule to a T. Maybe there are some spreadsheet warriors who have done it.
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C
Sure.
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A
But I think most people understand that if there's a bull market, maybe when the years are good, we spend a little more, we take another trip. Right. And when the years are bad, we pull back a little bit and we don't spend as much. And I think that's kind of common sense. I think that's the way you have to think about these things. You have to be flexible because it's not a Monte Carlo simulation where you get 10,000 opportunities to test out these different methodologies and try them all and see which one works the best, which is the best path. You get one shot of this and you could just have really good luck. And your portfolio is way bigger than you ever thought it would be. I'm sure there's a lot of people these days who have more money than they ever could have imagined because housing prices are up so much, the stock market is up so much, and they're just doing great and they're still earning 4% of their cash or whatever. But you could be unlucky. I had a guy who told me he retired in March of 2000, okay. The peak of the dot com bubble. And he said, I've been, you know, I've been retired ever since. And we did it. And I said, how did you do it? He said, I gave myself a margin of safety. I put four years worth of my portfolio, four years worth of spending into T bills. And that was my margin of safety because I. I kind of had figured bear markets last, you know, two, two and a half years on average. And if I can just see that through and not sell my stocks. And I thought it was just a brilliant, very simple strategy. He called it his four year rule. Right. I keep four and the number doesn't, you know, it's different for different people. Some people might be happy having one year worth of cash. Some, for some it might be seven years. Whatever it is, I think you have to have some sort of fallback like that. So you're not selling your stocks when they're down and then like having a double whammy of risk where you're now you're locking losses in.
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C
You know, it was interesting. I heard you on one of my favorite podcasts, the Compound and friends with Josh Brown and Michael Batnik. So Michael's your best friend, Josh is your boss. You're all like in it together. And I've been very delighted to be invited into your world for a period of time. And it's just, I think you guys do such a great job. But you had an interesting conversation that was about, you know, there's going to be a correction, there's going to be a bear market. But you also talked about it is possible that maybe these periods of loss and maybe even recessions in and of themselves, maybe they will be shorter periods of time. Is that something that you think is worth building into a plan? Like I am a wimp, okay, so let me just be clear about that. You know, and I'm sucking wind on my fixed income positions. I get it. It's okay because I'm boring and I like that. But is that something that you think is reliable in terms of planning that the world is changing in a very quick way.
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A
I don't like to say always or never when it comes to these things, but one of the things I've been thinking about a lot for the last 10 plus years is just how market cycles are speeding up because of the speed of information. Right. I remember I wrote a piece on the 1987 crash a number of years ago and I got an email from a guy who said, you don't realize how different things are today, Ben, than they were back then. I didn't know the 1987 crash happened until I was driving home from work and I turned the radio on, right? If something like that happened now, you'd hear about it instantaneously and there'd be immediate parsing of the data and what's going on. And people can move their money immediately through their phones. Back in the day you had to call up someone or go to a brick and mortar building to do it. And so I think those barriers to entry being knocked down, it's like a double edged sword. On the one hand, it's awesome that young people have a much easier time investing these days, right? There's zero dollar trade commissions there. You can invest in fractional shares. The minimums are essentially nothing. You can put any amount of money you want into the market to start and those bears to entry being Knocked down are great. But those bears entry being gone also make it easier for people to panic and for there to be air pockets. And I think that's kind of the trade off we've made.
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C
Yeah. And also for people to do really dopey things with their money. Too much of it. Like, as you know, I'm so, again, I'm self proclaimed. I'm a wimp, which means no gang. I don't own crypto. You can. I just don't. There is a fear that I have that, you know, that there is a sense that some of the younger investors that they're putting a little bit too much money in some of the riskier things. Whether it be crypto or whether it be prediction markets or betting online. I don't, you know, I sort of put that on. Or maybe even your own company stock. You know that if you got 45% of your money in your company stock and all of a sudden the thing tanks, that is a rough outcome. You love markets. I know you guys have a very disciplined approach to planning, but you also like talking about this stuff. So what is your recommendation? If people want to have a fun money account, what should they be considering? What is the approach appropriate percentage of their invested assets?
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A
I think the thing that's harder than ever these days is like the temptation to make changes is just growing by the day because there are so many different things to invest in. And I like the fact that you said, listen, I don't invest in crypto. Maybe that's good for other people. But me personally, I think people should absolutely have a list of things that they won't invest in. Certain types of products. Maybe you say no leveraged ETFs, right? No. Whatever it is, pick up, pick something. I don't invest in commodities. I don't. Whatever it is, I think you have to have some sort of limitations. I'm from Michigan, so the White Stripes was a big thing for us here when they first came out. So they had their. Their first album was called White Blood Cells. A lot of that's on a list of a lot of like best 2000s albums. And Jack White said when they did the album, they did, they did it in like eight days or something. And they said, how did you do this? How did you create this glorious album in such a short period of time? And he said, we had rules. And the rules were like no blues and, and no guitar solos and no slide guitar and no bass. And they had all these rules in place. And he said once you had those rules there's like a liberation of limitation. And I think that's the thing that people have to have these days since we have this fire hose. And guess what? AI is going to make it even worse because you're going to have AI based portfolios where you can create the rules yourself. Right. I have these 10 rules about the stock market. Pick stocks based on these rules and you'll click a button and it'll do it for you. And it's just going to be never ending the stuff you can do. So I think if you have some rules about the stuff you will invest in and then the stuff you won't invest in, I think that helps a lot.
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B
You know that thing where you get an amazing pair of shoes at a really great price and want to tell everyone about it?
- [16:47]
C
Yeah.
- [16:48]
B
So do we here at Designer Shoe Warehouse. We'll give you something to brag about, like the latest styles from brands you love, or the trends everyone's obsessing over, or shoes that make you feel like, well, you. So go ahead, show off a little. Buying shoes that get you the prices that get your budget. Head to your DSW store or dsw.com today. DSW. Let us surprise you.
- [17:10]
C
Hey gang, you know I've changed my tune on Bitcoin. Meaning I know that a lot of you are bitcoin curious and that's okay. I know you're not putting all of your money into this. If you've been curious about bitcoin but haven't made the jump yet. Cash App makes it easy. You can set up automatic purchases with zero fees or buy larger amounts also with zero fees. Start small or go bigger. It's designed to be simple either way. So whether you're just learning or ready to try it out, it's built to meet you where you are for a limited time. New customers can get $10 added to their balance. Just use code CASHAPP10 when you sign up. And don't forget this part. Send at least $5 to a friend in the first two weeks. Terms apply. Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners. Bitcoin services provided by Block Inc. Brand for additional information, see the Bitcoin disclosures at Cash App legalpodcast. Hey gang, you know it's been a tough job market and a lot of people looking to bring in some extra income. And if you've ever looked into starting your own company, you know how quickly the complexity piles up. Setting up systems, finding partners, and building processes from scratch can be A roadblock. That's where Fora comes in. Fora is a modern travel agency platform designed for entrepreneurs who want to build and scale their own travel business without starting from zero. They've basically packaged everything you need to launch and operate successfully into a single platform. Instead of spending months sourcing partnerships, Fora connects you to a network of over 7,000 preferred travel partners, which unlocks those amazing VIP perks for your clients like room upgrades and resort credits. As an advisor, you'll have full autonomy and control over your business using their industry leading booking and payments infrastructure to earn commission on every hotel, cruise and experience you book. It's a professional foundation that lets you focus on your clients rather than the logistics. Become a Fora advisor today@foratravel.com jillonmoney that's f o r a travel.com jillonmoney and make sure you tell them that we sent you foratravel.com jillonmoney I'm wondering if you think this democratization, this low friction environment of being able to buy and sell. I mean it is great because obviously when I came of age, you know, it was like call your broker and call your parents person and da da da, like that kind of thing. I think that now that there is a click of a button, do you still advise and do you think the gateway into the world is through indexing and a more passive approach rather than trying to go pick a create a portfolio for yourself of stocks even if you had the help of Claude?
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A
Yeah, I think for people starting out even like the Target Date fund is a great default. Now there are people who need to scratch an itch and I talk about in the book that if you want to have this little sidecar or fund portfolio that's fine, but limit it to 10% of your portfolio or 5% and if that scratching that itch and picking stocks or trading options or buying and selling crypto, whatever it is, whatever your thing is, if it allows you to leave the other 90, 95% alone. I think it's actually from a behavioral stance, the right move because some people just need that. Yeah, it's, it's funny, we have in my neighborhood right now we have teenagers who started driving and they fly down our neighborhood and we have a lot of kids playing in the neighborhood and they kept sending out notices to these teens saying hey, stop driving so fast. There's kids playing, it's not safe. The teenagers wouldn't listen. And I feel like an old man because I'm yelling at them from my Lawn. Guess what they had to do? They had to put speed bumps in the neighborhood, which stinks for me because I have to drive over them every time I go home. But I think it was the right thing to do because it curbed their behavior. And sometimes as an investor, you need these speed bumps, even if they are, you know, even if it doesn't make the most sense optimally.
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C
By the way, I love the idea of a young person like you. You have no idea that I literally stopped a car in the middle of the street yesterday. Young people driving, screaming down to the beach because I'm out in my summer house. And I just. I leaned over and I said, I don't want to be that person. I said, guys, I don't want to be that person. So I said, I saw three of your friends go down there. And yes, we all monitor license plates. We all know you're coming from the local high school. Everyone on this block knows you're coming to the beach. I just want you to know I've got these two little terriers. There are kids all over the place. Can you just take it easy? And kid looks at me and he's like, yes, ma'. Am. Now, he may have probably cursed me, by the way, as he drove off, but the guardrails up of speed bumps, the guardrails up of this is the percentage that I can afford to lose, to have in my fun money account. That's all well and good, but how do we help people understand that some of the tried and true approaches to investing, like, you know, using a passive approach, or yes, you know, you can have. It doesn't have to be 100%. Stocks can be a lot of stocks, but it doesn't have to be 100%. How do we convince people? Is the data telling the story? Or do you have too many hucksters out there, scrolling and finfluencers who were just shouting louder than the boring people like us on our lawn, saying, slow down.
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A
I do think behavior has gotten better. I mean, think about it. There's $12 trillion at Vanguard. BlackRock has 15 trillion. So there are people who are listening. And you see that in the data now. When there's a correction, money flows in. So I think a lot of people have learned their lesson for other people. I think some of them just need to pay their tuition to the market Gods make their mistakes. And for me, that was. I thought I was going to be the next Warren Buffett and pick stocks. And I did it for a few years and I realized that you know, 90% of my worry about investing was going to 10% of my portfolio. And I thought, why am I doing this? And then I could take those stock picks and kind of look at them next to the index funds and realize I'm not even beating these simple things that are doing nothing and they cost way less and it's way less brain damage. So, so I did it and I just stopped doing it. So I think that's one of the things too about having the long term position. And then some of the, you know, the fun account is you can compare as a benchmark and go, well, geez, I'm not even beating this target date fund. What's the point of this? I'm spending all my time doing this. So I think some people unfortunately need to learn the lessons themselves before they can decide, okay, fine, I'm putting it on autopilot because this makes no sense. Why don't I go do something better with my time?
- [24:02]
C
It's so funny though. It's like, it does make me laugh when people just, they really minimize the research. And by the way, so does the industry. Okay, so gang, listen, we've got 50, 60, 100 years of evidence that shows that people who stay in with stock market investing, that public markets, they've done really well. Let's say stocks about, let's say index stock indexes in the U.S. 10% a year, bonds, let's say 5 or 6% treasury bills do keep pace with inflation over time. So all of this makes sense. And yet we do have even a lot of smart people who are like, well, I'm just going to invest in private equity and private this and private that. Why are they doing that? Because they want to believe someone knows better.
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A
It's two people. It's interesting. There's two different kinds of investors that think this. The naive people who are just starting out and they're very overconfident, which tends to be a lot of young people, right? They get a little bit of knowledge, they read like one book and they go, oh my gosh, I've got this mastered. And then there's the experienced people who are in another field. Think about like doctors and lawyers and engineers. These people who are very educated and they're very intelligent and they think that that intelligence translates into the market. And they assume that the harder they work, the better they're going to do. And it takes people a while to realize that, like there's no points for degree of difficulty in the, in the investment world. Like the markets don't Reward you for that. And in many areas of life, trying harder, trying and putting more time and actually improves your results. And investing is not one of them. And I think it's hard for intelligent people to admit that to themselves. They assume that there has to be like this holy grail that exists, if only they can find it.
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C
So you've now done this for, I don't know, whatever, 15 years about. Right.
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A
Something like that.
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C
What surprises you today?
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A
It's stuff that I shouldn't be surprised about, but I'm constantly surprised by, like, the psychology of human beings. And I think the biggest one that surprised me this decade is how pissed off people got about inflation because we just hadn't dealt with high inflation for 40 years. And obviously you know that people don't like rising prices, right?
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C
Yes.
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A
But then you, you show people, you talk about data, you show people the data and you say, hey, yes, prices rose a lot, but wages kept pace, or they kind of in some cases rose faster. And for certain groups of people, wages did even better. Like, so guess what? You're kind of in the same place. But people do not want to hear that. They don't want to listen to that. In the psychology of inflation, I totally underestimated how people would react to something like that because I had never experienced it. Right. I didn't live through the 1970s. So I wrote a couple chapters in the book about the psychology of inflation and how people think about it and that side of thing. Like, it's funny, I'm still fascinated because I think the markets are this big laboratory for human emotions and human nature. And I feel like I'm constantly still learning, like, how it's going to impact people and how people's emotions can get the best of them.
- [26:54]
C
I learned something in the great inflation that you cannot tell people that, like, oh, the reason you got a raise is that that was inflation. Because someone's like, well, no, I earned it. I'm worth that. As opposed to, like, well, no, they had to give raises to everybody. Like, this is what was happening. So it's that little click off that, like, doesn't make sense. But also that even as we have, like, resurgent in gas prices now, and there you are in, you know, the center of the auto industry for the United States. Right. And that, you know, I said to somebody, they were like, well, you know, we spend so much less money on gasoline. It's not going to really impact people long term, says somebody at work to me. And I said, oh, you know what I find? I find that when you drive around and all you see is four or five bucks a gallon, it is literally like seeing an advertisement for high prices in your face all the time. And if you think that we are not impacted by that, you're nuts. Doesn't matter what you spend on gas. It doesn't. It's still freaky, right?
- [28:01]
A
Yes. And I've always, I've often wondered, what if we did other prices on big, huge signs like that? Like, what other. What other prices could freak people out as much? Because you're right. It just, it stares you at the face when you drive down the road. And especially since we drive, there's so many of these big, huge trucks and SUV gas guzzlers in this country that it can hurt. Even if you're. It's not going to totally impact you and put you in the poor house, it still is painful to see these things and to go to a restaurant and say, man, I'm paying $25 for a sandwich that I bought for $15 10 years ago. Like, it's, it's a constant reminder to people with the prices. And I think that's the problem. You're right. The paycheck comes once every two weeks or once a month or whatever, and you kind of forget it. And you think, yeah, that's. That's the fruit of my labor. I did this. I worked hard for this. But the price thing, it's constantly in your face and it's like loss aversion where the higher prices sting because it feels like it's being taken. It's something that's being taken from you.
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C
Just one last bit here about how people get so freaked out about investing when things turn sour and being unlucky about when you invest. And you have a lovely section in the book that talks about, you know, essentially, even if you invest at a terrible time, if you hang on and you've been thoughtful and you're not reactive, you're still going to do well, right?
- [29:27]
A
Yeah. I look at, like, what if you just bought at Market Peaks, but you still held on to your stocks and the results? I didn't know what they're going to be. Sometimes I have the data, you know, in hand and I write about it. Other times I doing the data and calculating it, and then I realize, like, oh, this actually is better than I thought. This was one of those instances where, yeah, if you just kind of extend your time horizon, it, you know, if you would have invested right before Lehman Brothers went under in September of, you know, 2008, the results are Pretty darn good. And you would have lived through, like, a 40 crash right after that.
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C
Yeah.
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A
And there's so many of those instances where if you just say, like, okay, I'm going to extend my time. And that's. I think that's the biggest thing for almost everyone, no matter what you're investing in, is just defining that time horizon. Like, what. How long are you investing for? When do you need to spend the money? And that's the thing, I think. Not enough people, especially when it comes to, like, stock picks. Like, how long do you plan on. Is this a trade or is it an investment? Like, how long do you plan on having it for? Not just, like, I hope to make a lot of money. It's explaining, like, I'm going to invest in this thing for seven to 10 years that totally changes your mindset versus something that's going to be held for seven to 10 months.
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C
And I tell you what else affects your mindset. And I don't want to end on a sour note, but just a realistic note, I would say that, Ben, I know you experienced great loss in your brother's death, and I'm wondering how you think that changed you and your approach to what you do every day.
- [30:51]
A
It's funny that you don't want to think about finances at a time like this, when you lose a loved one. But it really did make me rethink money in a lot of ways. And I've always been. I think my dad is always kind of a frugal person. It's funny, I was home last weekend visiting my parents. My dad is going to be 80 next year. And I wash my hands and I go to use the soap, and the soap gets. You know, the soap dispenser gets to the bottom, and my dad refills it with water to keep the soap going. That's what I love him. That's how cheap he is. So I think I got a lot of that, like, frugality from him. But my brother was far more adventurous and was really big about enjoying yourself, enjoying things now. And I think what I learned from that is just, you know, he died in his mid-40s. He even said this. He's like, you can't take it with you. And, like, you'd never know when something bad is going to happen. So you have to enjoy some of it now. You can't just. It can't be all about delaying gratification for the future. You have to enjoy some of your money now. And that's the biggest change for me personally. And I see it, I've seen it a lot with wealth management clients too. These people have all these plans, they've been saving and saving for 30 or 40 years. Get to retirement and guess what, terminal cancer for one of the spouses or something like I, I've seen this multiple times and so I really do think you have to enjoy some of it now, otherwise what's the point point of working hard in the first place.
- [32:06]
C
We hear from people who have saved up all this money and just they, so they've accumulated, but they really have a hard time decumulating meaning taking money out of their accounts. You taught me something early on when I came on your show once and you, you pulled up a chart about, you know, people have a whole bunch of money saved. What is fascinating is that they are often people who just can't spend enough that they will net net have greater wealth as they continue. That to me was like this signal like everyone's so fearful of running out of money. What you showed me is that actually for a lot of people, they're never gonna run out of their money. They should spend some of their money. They should have enjoy that. They should take pleasure in the fact that they, they can do things. So what can I do to, to give them more like greater permission?
- [33:01]
A
Yeah. It's funny that the 4% rule, people don't realize that's that protects you against the worst case scenario like the 1970s, 10% inflation or the Great Depression level crash. But most of the time you're going to end up with more money than you started with if you follow the 4% rule. Because most of the time the market goes up. It's not always the worst case scenario. And I never thought in a million years that it would be a problem for people to spend money because we love spending money in this country. Yeah, this is, we're, if they had an Olympics for consumption, we would, we would beat every other country because we're so good at it. But there are people who develop habits over 20, 30, 40 years of saving and then to tell them to turn around and now that principal value is going to decrease, they go, no way, I'm not going to do that. Are you kidding me? There's so many other risks out there and I think a lot of them just need help understanding, like, am I going to be okay? And these are conversations we have with our clients all the time. Like if, if I take my family on that, that cruise around the world, right? I, I pay for everyone. Am I going to be, is My financial plan gonna be okay if I buy that vacation home? Am I gonna be okay? But I also think you have to think about it in terms of, like, your health, too, right? There's some study in the UK that says, yes, people are gonna live like 30 years in retirement on average, but their health is only going to be optimal for like, 12 years in retirement. And so we actually have. We have an advisor who does two separate spending plans for retirement. One of them is that first leg over the first 10 years or so where he says, turn the dial up and spend more now while your health is going to be better, and then you're going to dial it down going back further. And I think that's the kind of thing you have to think about, like, when can I actually enjoy the bunny and use it? You know, where I can. Where I'm not going to be on a walker or something. And I can go around and do all the tours and walk and sit in an airplane and these things.
- [34:45]
C
If you've got a question about anything Ben and I discussed, maybe you think that you're able to outguess the market. Maybe you want to understand if your financial plan is flexible and durable, and maybe you need some help managing the psychology of what you're doing. All you need to do is go to our website, jillonmoney.com, click the contact us button, write us a note, and of course, course, if you'd like to join us live, all you need to do is check the box, and Mark will do everything else. It is Friday. Let's do some thank yous. Our music is composed by Joel Goodman. Mark Tellersio is the executive producer and king of all things web. We are distributed by Odysee. By the way, you can subscribe to us on the Odysee app or wherever you find your favorite podcasts. Please do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for the listening. We'll talk to you on Monday.
- [35:41]
A
Are you really buying a car online on Autotrader right now? Really? At a playground? Yeah, really. Look at these listings from dealers. Wow, your search can really get that specific. Really? And you just put in your info and boom, car's in your budget. Mom needs a second. Honey, you can really have it delivered real or I can pick it up at the dealership. One sec, sweetie. Mommy's buying a car. I think your kid is walking up the slide. Kyle. Again? Really?
- [36:08]
C
Auto trader. Buy your car online?
- [36:10]
A
Really?
- [36:12]
C
Hi, this is Jill Schlesinger, CBS News business analyst, certified financial planner and the host of the Jill on Money Podcast. Beginning, middle or end of the year, it's always a great time to take control of your your financial life, and the Jill on Money Podcast is here to help your questions make it possible for me to provide unconventional and entertaining insights on your money and more importantly, on your life. Follow and listen to Jill on Money wherever you get your podcasts.